Funds
can be
electronically
transferred
to us
either
by wire
or by an
automated
clearing
house
(ACH).
There
are
differences
between
wires
and
transfers
via ACH
and the
latter
are more
vulnerable
to
recall.
This
does not
happen
frequently,
but
funds
transferred
through
an ACH
can be
reversed,
provided
the
guidelines
of the
ACH are
adhered
to.
ACH
transfers
have
regularly
been
used by
some
subprime
lenders
and
unsuspecting
title
agents
have
been
surprised
by
recalls
of funds
they
thought
were
collected
and not
reversible.

What can
a title
company
do to
protect
itself
from
this
possibility?
One
possibility
is to
confirm
with
your
bank its
procedures
regarding
reversal
of
funds.
Some
banks
will not
authorize
this
practice
without
the
consent
of the
account
holder.
If your
bank
authorizes
funds
reversal
without
your
consent
you may
inquire
as to
whether
the bank
will set
up a
hold or
block
(commonly
called
“debit
blockers”
or debit
filters”)
on your
account
so that
any
reversal
or
recall
must be
authorized
by you.
If your
bank
will
not, the
following
guidelines
may
help:

Do
not
transfer
via
wire
transfer
if
you
receive
funds
via
ACH.
They
are
not
the
same.

If
you
must
receive
an
ACH
transfer,
treat
it
as
you
would
treat
a
personal
check
with
an
appropriate
holding
time
to
“clear”,
usually
one
to
three
business
days
(discuss
this
with
your
bank).

Consider
establishing
a
separate
account
for
incoming
transfers
only,
and
then
transfer
the
money
immediately
to
your
escrow
account
upon
receipt.
It
may
be
harder
to
recall
a
transfer
once
it
leaves
the
receiving
account.

If
you
are
unsure
of
the
financial
stability
of a
lender
with
which
you
are
doing
business,
require
a
wire
transfer.

Old Republic Title Update is published by the Mid-Atlantic Area Office of Old Republic National Title Insurance Company in an effort to provide information relative to our industry on a timely basis. None of the materials included in this publication should be deemed legal or underwriting advice or should be acted upon without prior consultation with your underwriter or counsel.